Travel nurses and CRNAs often work in multiple states throughout the year. While that flexibility can create professional opportunities, it also creates tax complexity. Multi-state income reporting requires careful documentation, clear recordkeeping, and an understanding of where and how income must be reported.
If you worked assignments across state lines this year, preparing early for the tax season can prevent filing delays, incorrect tax returns, and unexpected balances due.
Why Multi-State Tax Filing Is Different for Travel Nurses and CRNAs
Unlike traditional employees who work in one location, travel nurses and locum tenens CRNAs frequently earn income in multiple jurisdictions. Each state has its own tax rules regarding residency, nonresident income, and filing requirements.
Resident vs. Non-Resident State Tax Returns
In most cases:
- You must file a resident return in your home state.
- You must file nonresident returns in states where you earned income.
Your resident state typically taxes all income, regardless of where it was earned. However, you may receive a credit for taxes paid to another state to avoid double taxation.
The key issue is determining:
- Where you were considered a resident
- Where you physically worked
- How much income is sourced to each state
What Documents You Should Gather Before Filing
Income Records by State
You should gather:
- All W-2s and 1099 forms
- Pay statements that identify state withholding
- Contracts or assignment agreements showing work locations
- A list of states worked in and assignment dates
Many staffing agencies report income to the state where services were performed. Reviewing state withholding on your W-2 is critical to ensure accurate reporting.
Assignment Timeline and Travel Logs
If you worked in several states, create a simple timeline showing:
- Start and end dates of each assignment
- Physical location of work
- Days worked per state, if applicable
This documentation becomes important if income must be allocated between states.
Understanding Tax Home and Its Importance
For travel healthcare professionals, ‘tax home’ is especially important for federal travel expense treatment and reimbursements. State filing still generally depends on residency and where you physically performed services.
What Is a Tax Home?
Your tax home is generally your primary place of business or employment, not necessarily where your permanent residence is located.
If you maintain a regular place of business in one area and temporarily travel for assignments, that primary area is usually considered your tax home.
However, if you move from contract to contract without maintaining a primary business location, your tax home status may differ.
Why Tax Home Affects Multi-State Filing
Your tax home can impact:
- Deductibility of travel expenses
- Eligibility for certain reimbursements
- State residency determinations
If your assignments are considered temporary, your primary residence state may remain your resident state for filing purposes.
Common Multi-State Tax Filing Scenarios
Multi-state filing varies depending on how income was earned and where assignments were located.
CRNAs Working Through Staffing Agencies
If a staffing agency issues your W-2, state withholding is often allocated based on the work location. You may need to file in each state listed on the W-2, even if assignments were short-term.
1099 Travel Nurses or Locum Tenens Providers
If you are classified as a 1099 contractor, you are responsible for tracking income by state. No automatic withholding may occur, which increases the importance of estimated tax planning.
States Without Income Tax
If you worked in a state without income tax (such as Texas or Florida), you generally will not file a state income tax return there. However, your resident state may still tax that income.
How Credits for Taxes Paid to Other States Work
Most states allow a credit to prevent double taxation when income is taxed in both your resident state and a nonresident work state.
For example:
- You live in State A.
- You work temporarily in State B.
- You file a nonresident return in State B and pay tax there.
- You then claim a credit on your State A resident return for taxes paid to State B.
Each state has its own calculation rules, which makes proper allocation essential.
Estimated Taxes and Withholding Considerations
Travel healthcare professionals often experience fluctuating income. If you worked in multiple states and withholding was insufficient, you may need to make estimated payments.
If you are self-employed or working as a 1099 contractor, you should monitor:
- Federal estimated payments
- State-level estimated payments, if required
Underpayment penalties can apply if sufficient tax is not paid throughout the year.
Recordkeeping Best Practices for Multi-State Workers
Clear documentation simplifies multi-state filing.
Maintain:
- Copies of contracts and assignment letters
- Proof of residency (lease, mortgage, driver’s license)
- Travel and lodging records
- State tax payment confirmations
The IRS provides general recordkeeping guidance in Publication 583. While this publication focuses on business records, its principles apply broadly to documentation retention.
Start the Filing Process Early
Multi-state returns require additional preparation time. Waiting until April often creates unnecessary stress, especially when state credits, income allocations, and withholding discrepancies must be resolved.
Preparing early allows:
- Time to correct withholding errors
- Proper allocation of income by state
- Review of estimated payments
- Strategic tax planning before filing
Start the New Tax Season with Clarity
Multi-state tax filing does not need to feel overwhelming. With organized records, accurate allocation of income, and timely review of state requirements, you can file confidently and avoid common mistakes.
If you need assistance reviewing your multi-state income, verifying tax home status, or preparing state returns, schedule a consultation with us.
